Last Tuesday a tragic event happened that left millions of people all over the world in despair.
The Greatest Football Club in the World, AC Milan, fell to the greatest team on the planet, FC Barcelona.
Now if you are reading this and you do not have a clue as to what I am referring to, find the nearest red-blooded testosterone filled male to explain it to you.
This event was witnessed and followed by millions of football fans all across the globe, in different time-zones, languages, continents and nations. But regardless of where those fans sat or what dialect they spoke they all understood the universal language of the beautiful game and I'm sure that the No 10 Barca jersey will be spelt "Messi" regardless of where you are in the world.
But this piece isn't meant for me to voice my concerns over "soft" penalties being awarded to certain Spanish teams or to boast of Milan's greatness as the most successful Club in football history. This week's article is meant to focus on the fact that the world is a much smaller place than it used to be… and more importantly, it is a much more accessible and interconnected place.
Advances in transportation, telecommunications and technology have accelerated the pace of information transfer and has removed both borders and distance. Global communication and trade is no longer held in the hands of the few but can be leveraged by almost any global citizen with the correct tools. The Internet, satellites, super tankers, mobile devices, pipelines, transatlantic flights, fibre optic cables, expressways, high-speed trains, ports, the Panama canal, sources of energy and other infrastructure, have all changed how we access information, trade and compete on the world stage.
In this changing world, the nature of how we as a nation and businesses here in Trinidad and Tobago compete is changing; and our ability to access world markets is changing. These changes can be seen on the macroeconomic level in terms of how we attract foreign direct investment.
Traditionally, any foreign direct investment would have been in the energy sector and the downstream industries of methanol and ammonia. We would have provided incentives, be it tax holidays or otherwise, and created infrastructure to facilitate the build out of petrochemical plants. This approach has been quite successful in the past but in the current global climate if we do not actively seek out new export markets and hard currency investors then we can find ourselves being uncompetitive and obsolete.
Refreshingly, the Government has been proactive in this regard with trade missions to key emerging markets such as Brazil, India and Panama. Hopefully, these out-bound missions to trade partners and poten-tial investors will bear fruit, only time and execution will tell. Notably, the upcoming "Trade and Investment Conference" and "Caribbean Investment Week" have continued to attract international investors and exhibitors. I'll certainly have to explore the success of these events when that time comes.
Economic theory states that if a nation or business is able to have a competitive advantage then it will create value for its citizens and stakeholders. The more sustainable the competitive advantage, the more difficult it will be for its competitors to neutralise the advantage. The competition here is not just for trade, but also for labour, talent, resources, capital and global influence. This is true for both countries and industry, as long as there are scarce resources there will be competition for them.
Competitive advantage can be either "comparative" or "differential". A comparative advantage means that the firm or country has the ability to produce a good or service at a lower cost than its competitors. This allows these goods or services to be sold at a lower price than the competition or to attract a higher profit margin. As a nation this has been true for both our energy sector on a global scale and our manufacturing and financial services industries on a regional scale.
Where we need to invest going forward is in developing our differential advantage. This is being able to develop and deliver products and services which stand out in the market as being unique or of a better quality. It is in these areas that we have not developed our product and service offerings into a competitive value proposition. Don't get me wrong, we have so much to offer the world that makes us unique and that is of world class quality… from entertainment, to music, to our hot peppers, rig construction, energy sector skill set and experience, Carnival and all its derivative industries and our ability to be creative and innovate.
Our next big challenge and effort should be on developing a differential advantage in all of the uniquely Trinbagonian products, services and experiences. This will require us to look at our own selves in a new way, with fresh eyes, for the things that we take daily for granted from a good roasted pepper sauce to the lush Northern Range to our beautiful cosmopolitan people are all the ingredients for unique value propositions that can be exported to the world. And this world isn't limited to North America but includes the billions of people in the growing middle class in Asia, Africa and Latin America.
These foreign and distant places are all within reach in this shrinking and interconnected world in which we live; and the Internet and telecommunications have provided us with the ability to access distant lands in creative ways. So let us each challenge ourselves to think about what unique differentiating advantage can be leveraged into an exportable value added product or service.
Send me your thoughts and ideas… and let us continue to move
T&T to the World!
Forza Milan! "Tu sei tutta la mia vida"… we can still retain our Serie A crown! Live richly, you can follow me on Twitter at: @julienomics
Jason Julien is a financial analyst and registered trader and can be contacted at: firstname.lastname@example.org or followed on Twitter at: @julienomics